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The interdependence between CO2 emissions, economic growth, renewable and non-renewable energies, and service development: evidence from 65 countries

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Abstract

This study examined the interdependence between CO2 emissions, economic growth, energy generation, and value-added service for a panel of 65 countries. An important contribution of this study is to explore the role of service sector development in the mitigation of pollutant emissions, considering renewable energy as a resource of production. The authors used the annual data of studied variables covering the period of 1980 to 2014 and utilized the vector autoregressive (VAR) model, Granger causality, and Toda–Yamamoto tests. The empirics of Granger causality suggest that there are strong bidirectional causalities between CO2 emissions and non-renewable energy, CO2 emissions and value-added service, non-renewable energy and value-added service, and unidirectional causality from CO2 emissions to renewable energy in the short-run. Furthermore, the empirics suggest that bidirectional causalities exist between the service sector toward CO2 emissions and value-added service toward non-renewable energy in the long-run. The findings of this study support the validity of an environmental Kuznets curve for the case of sample countries. The study proposed that increasing renewable energy rates could be good plans to stimulate service activities and decreasing non-renewable energy rates will reduce pollutant emissions.

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Notes

  1. All existing literature are summarized in Table 1 that details the determinants of CO2 emissions.

  2. Following the definition of the Word Bank, value-added service includes service related to the retail and wholesale trade, hotels and restaurants, transport, government, bank, and the financial institution, education, health, and real estate.

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Authors and Affiliations

  1. FSJEG Jendouba, University of Jendouba, Jendouba, Tunisia

    Mehdi Ben Jebli

  2. QUARG UR17ES26, ESCT, Campus University of Manouba, 2010, Manouba, Tunisia

    Mehdi Ben Jebli

  3. Department of Finance and Economics, College of Business and Economics, Qassim University, P.O.Box: 6640, Buraidah, 51452, Saudi Arabia

    Montassar Kahia

  4. LAREQUAD & FSEGT, University of Tunis El Manar, Tunis, Tunisia

    Montassar Kahia

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  1. Mehdi Ben Jebli
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  2. Montassar Kahia
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Correspondence to Mehdi Ben Jebli.

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Ben Jebli, M., Kahia, M. The interdependence between CO2 emissions, economic growth, renewable and non-renewable energies, and service development: evidence from 65 countries. Climatic Change 162, 193–212 (2020). https://doi.org/10.1007/s10584-020-02773-8

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